Slater v. Ohio Dep't of Rehab. & Corr.

• Decision Date: 17 April 2018
• Docket Number: No. 17AP–453,17AP–453
• Citation: 111 N.E.3d 492,2018 Ohio 1475
• Parties: James W. SLATER, Admr., Plaintiff–Appellee/[Cross–Appellant], [Grubb & Associates, LPA, Intervenor–Appellant/Cross–Appellee], v. OHIO DEPARTMENT OF REHABILITATION AND CORRECTION, Defendant–Appellee/[Cross–Appellee].
• Court: Ohio Court of Appeals

111 N.E.3d 492

2018 Ohio 1475

James W. SLATER, Admr., Plaintiff–Appellee/[Cross–Appellant],[Grubb & Associates, LPA, Intervenor–Appellant/Cross–Appellee],

v.OHIO DEPARTMENT OF REHABILITATION AND CORRECTION, Defendant–Appellee/[Cross–Appellee].

No. 17AP–453

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered on April 17, 2018

On brief: Edward L. Gilbert Co., LPA, and Edward L. Gilbert, Akron, for plaintiff-appellee. Argued: Edward L. Gilbert.

On brief: Grubb & Associates, LPA, Natalie F. Grubb, Medina, and Mark E. Owens, Cleveland, for intervenor-appellant. Argued: Mark E. Owens.

DECISION

KLATT, J.

{¶ 1} Intervenor-appellant, Grubb & Associates, LPA ("Grubb"), appeals a judgment of the Court of Claims of Ohio that awarded Grubb $3,000 in attorney fees. Plaintiff-appellee, James W. Slater, administrator for the estate of Michael Ferrara, Jr. ("the Estate"), cross appeals from the same judgment. For the following reasons, we reverse the trial court's judgment.

{¶ 2} While Michael Ferrara, Jr. was imprisoned at the Ross Correctional Institution, another inmate, Logan Murphy, attacked and killed him. Michael Ferrara, Jr.'s parents, Michael Ferrara, Sr. and Louise Ferrara, hired Grubb to open an estate for Michael Ferrara, Jr. and to pursue a wrongful death action against the Ohio Department of Rehabilitation and Correction ("ODRC"). On January 19, 2013, the Ferraras entered into a contingency retainer agreement with Grubb. According to that agreement, Grubb would collect a contingency fee of 35 to 40 percent of any amount the Ferraras recovered from ODRC. If the Ferraras recovered nothing, then they would "not be indebted to [Grubb] for either costs or legal fees." (Intervenor's Ex. A at 2.) The agreement also provided, "Client grants attorney a lien on all claims in which attorney represents client under this agreement. The lien shall cover any sums due and owing to attorney at the termination of attorney's services and will attach to any money or property recovered by client."Id.

{¶ 3} After Grubb secured the Ferraras as clients, a paralegal drafted and submitted a public records request to ODRC seeking records related to Michael Ferrara, Jr. and Murphy, as well as prison policies and personnel. Grubb employees reviewed the records received from ODRC and forwarded a copy of those records to the Ferraras. Additionally, a Grubb associate attorney talked with a prosecutor regarding the criminal case against Murphy. That associate also emailed with a local reporter about articles the reporter wrote about the death of Michael Ferrara, Jr. Grubb employees passed along information and documents uncovered through these communications to the Ferraras. Finally, Grubb engaged a litigation consultant to "evaluate case strengthes [sic]/weaknesses; advise of who to depose, etc." (Intervenor's Ex. H at 7.)

{¶ 4} In September 2014, the Ferraras terminated their attorney-client relationship with Grubb and hired Edward L. Gilbert Co., LPA ("Gilbert") instead. Soon thereafter, Gilbert opened an estate for Michael Ferrara, Jr. and, as attorney for the Estate, filed a wrongful death action against ODRC in the Court of Claims.¹ Six months after commencement of the action, Grubb moved to intervene in order to pursue a charging lien. Representing itself as former counsel for the Estate, Grubb asserted "an attorney's charging lien for fees earned and costs in [its] representation of Plaintiff in this case." (Notice of Attorney's Charging Lien and Mot. to Intervene for Limited Purpose of Pursuing the Attorney's Charging Lien at 1.) By virtue of the charging lien, Grubb sought payment of $6,713.43 in fees and costs, plus 1.5 percent interest, from any judgment or settlement proceeds due to the Estate. The Court of Claims denied Grubb's motion, holding that Grubb had no interest in the action unless and until a judgment or settlement created a fund from which Grubb could collect its fees and costs.

{¶ 5} After extensive discovery, a trial on the wrongful death action began in September 2016. During trial, the parties reached a settlement. Grubb then filed a renewed motion to intervene in order to assert a charging lien. In the motion, Grubb again represented itself as former counsel for the Estate and asserted a charging lien for fees and costs accrued during its representation of the Estate in the wrongful death action.

{¶ 6} In response to Grubb's motion, the Estate pointed out that Grubb had represented the Ferraras, not the Estate. Thus, Grubb had not done any legal work for the Estate and, consequently, could not seek payment from settlement proceeds to be paid to the Estate. The Estate also contended that no enforceable charging lien existed because Grubb had not helped to create the settlement reached between the Estate and ODRC. Grubb did not participate in opening an estate for Michael Ferrara, Jr., nor in initiating or prosecuting the litigation against ODRC. Moreover, in accomplishing those tasks, Gilbert neither relied upon the material and information Grubb had generated during its representation of the Ferraras nor used the litigation consultant Grubb had hired.

{¶ 7} While Grubb's motion to intervene was pending, the Estate and ODRC submitted an executed settlement agreement to the Court of Claims. The parties also submitted a copy of the Cuyahoga County Probate Court's entry approving the settlement and setting the distribution of the settlement funds. In that entry, the probate court ordered payment of $60,000 in attorney fees for the legal services that Slater & Zurz, LLP ("Slater") and Gilbert rendered with respect to the wrongful death action. The probate court also addressed the question of Grubb's charging lien. The "Settlement Distribution Compilation" attached to the entry stated:

Attorney Natalie Grubb of Grubb & Associates has filed an attorney's charging lien for "$6,713.43, plus 1.5% interest per month, per retainer, from September, 2014, totaling $9,520.08" in the Estate's wrongful death litigation in the Ohio Court of Claims. From its attorney fees awarded herein, Slater & Zurz, LLP and Edward L. Gilbert Co., LPA will indemnify and hold the Estate harmless from and pay any fees, costs and expenses finally determined to be owed by the Estate for said charging lien.

The entry reiterated that "Slater & Zurz, LLP and Edward L. Gilbert Co., LPA will indemnify and hold the Estate harmless from and pay any fees, costs and expenses finally determined to be owed by the Estate to Grubb & Associates, LPA." (Entry Approving Settlement and Distribution of Wrongful Death and Survival Claims at 2.)

{¶ 8} The Court of Claims noted the filing of the settlement agreement and scheduled a hearing on the issue of the charging lien in an entry dated December 16, 2016. Approximately one month later, the Court of Claims issued an entry approving and confirming the settlement agreement and dismissing the wrongful death action. The entry also ordered that the settlement warrant of $150,000, made payable to the Estate, be sent to Gilbert.

{¶ 9} At the February 22, 2017 hearing regarding the charging lien, Natalie Grubb testified and introduced documentary evidence. After considering the evidence, the trial court determined that the benefit that Grubb's work conferred upon the settlement outcome did not support its demand for $6,713.43, plus interest. The trial court found, instead, that Grubb was entitled to recover on the basis of quantum meruit the amount of $3,000.

{¶ 10} Grubb now appeals the trial court's judgment, and it assigns the following errors:

[1.] The Trial Court Erred and Abused Its Discretion in Awarding to Intervenor–Appellant Less Than The Fees Owed, As Secured By Its Attorney Charging Lien.

[2.] The Trial Court Erred in Using a Quantum Meruit Analysis to Determine Reasonable Attorney's Fees Owed to Intervenor–Appellant When There Is An Enforceable Attorney Charging Lien Supported By An Express Contract.

{¶ 11} The Estate cross appeals, and it assigns the following errors:

[1.] The Trial Court Did Not Have Subject–Matter Jurisdiction.

[2.] The Trial Court erred when it Granted Grubb's Motion to Intervene.

[3.] The Trial Court erred when it found that Grubb is entitled to recover on the basis of quantum meruit in the amount of $3,000.00 from the settlement proceeds.

{¶ 12} We will begin our review with the Estate's cross appeal. By its first assignment of error, the Estate argues that the trial court lacked subject-matter jurisdiction to determine whether Grubb had an enforceable charging lien and, if so, the amount due to Grubb. We disagree.

{¶ 13} " ‘Subject-matter jurisdiction of a court connotes the power to hear and decide a case upon its merits’ and ‘defines the competency of a court to render a valid judgment in a particular action.’ " Cheap Escape Co. v. Haddox, L.L.C. , 120 Ohio St.3d 493, 2008-Ohio-6323, 900 N.E.2d 601, ¶ 6, quoting Morrison v. Steiner , 32 Ohio St.2d 86, 87, 290 N.E.2d 841 (1972). Because a court without subject-matter jurisdiction lacks the power to adjudicate the merits of a case, parties may challenge jurisdiction at any time during the proceedings. Pratts v. Hurley , 102 Ohio St.3d 81, 2004-Ohio-1980, ¶ 11. Whether a trial court possessed subject-matter jurisdiction is a question of law, which an appellate court considers de novo. John Roberts Mgt. Co. v. Obetz , 188 Ohio App.3d 362, 2010-Ohio-3382, 935 N.E.2d 493, ¶ 8 (10th Dist.).

{¶ 14} Probate courts are courts of limited jurisdiction and, consequently, they may only exercise that authority granted to them by statute and the Ohio Constitution. In re Guardianship of Hollins , 114 Ohio St.3d 434, 2007-Ohio-4555, 872 N.E.2d 1214, ¶ 11. R.C. 2101.24 delineates the jurisdiction of probate courts. As relevant to this case, that statute states:

[T]he probate court shall have exclusive jurisdiction over a particular subject matter if both of the following apply:

(a) Another section of the Revised Code expressly confers jurisdiction over that

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